Spain

Over the past year, the following significant reforms have been made to Spanish law on direct taxation of individuals: 

Royal Decree-Law 3/2025

Royal Decree-Law 3/2025, passed on 1 April 2025, whereby the incentive programme linked to electric mobility (MOVES III) for 2025 is established, was published in Spain’s Official State Gazette on 1 April 2025.

According to this law, the tax credit for the purchase of 'plug-in' electric vehicles and fuel cell vehicles, as well as charging points, is extended for another year.

Royal Decree-Law 10/2024

Royal Decree-Law 10/2024, passed on 23 December 2024, establishing a temporary energy tax in 2025, was published in the Spanish Official Gazette on 24 December 2024.

The Royal Decree-Law was not ratified by Parliament, and its repeal was agreed during its sitting of 22 January 2025.

Royal Decree-Law 9/2024

Royal Decree-Law 9/2024, adopting urgent measures in economic, tax, transport, and social security matters and extending certain measures to address situations of social vulnerability, was approved on 23 December 2024 and published in the Spanish Official Gazette on 24 December 2024.

The Royal Decree-Law was not ratified by Parliament, and its repeal was agreed during its sitting of 22 January 2025.

Act 7/2024

Act 7/2024, of 20 December 2024, that amends some of the Personal Income Tax (PIT) Act provisions, bringing in measures to mitigate the economic consequences of the DANA flood in the Autonomous Region of Valencia, and other measures to increase revenue collection, such as, an increase in the savings tax rate.

The most important measures contained in this legislation that affect individual taxation are:

• The increase of the savings base maximum tax rate from 28% to 30%.
• The tax exemption for PIT purposes (and gift taxes) with respect to certain gifts made by companies to their employees affected by the DANA flood and their families.
• The establishment of a specific procedure to obtain a reduction in the amount to be included as employment income in the PIT return when certain retirement or disability pensions are received by mutualistass whose contributions could not be subject to a reduction or deduction in taxable income at the time they were made. 
• A 30% reduction in tax on income from literary, artistic, or scientific works and employment income obtained by artists under a special employment relation, when certain requirements are met.

Organic Law 1/2025

Organic Law 1/2025, of 2 January 2025, introduces measures to the Justice System for efficiency purposes. Since it establishes mandatory mediation (or an alternative method to resolve disputes) before the filing of a lawsuit, within civil, commercial, and social processes, the Law adapts the tax exemption on compensation received as a result of civil liability for personal damages, regulated in the PIT Law, which was applicable only when it was established by a judgement.

As a consequence of this measure, the law provides that it will also be applicable when the compensation is agreed through alternative dispute resolution methods and payment is made by the insurance company.